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TMI Blog1969 (12) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... ended Diwali, 1949 ? and (2) Whether, for the purpose of bringing to tax the dividend income of the assessee for the assessment year 1950-51 and having regard to the provisions of the Part B States (Taxation Concessions) Order, 1950 (in short " Order "), the dividend income say of Rs. 34,468 (gross Rs. 50,137) as well as the dividend income of Rs. 2,28,392 should be subjected to tax at the concessional rates mentioned in the Schedule to the 'Order' as held by the High Court ? " The assessee is a Hindu undivided family with its head office at Indore and branches at several other places in some of the former Part B States including the State of Madhya Bharat. It derived its income from several sources such as property, businesses, managin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut of this income Rs. 34,468 were attributable to the profits that accrued or that could be deemed to have been accrued to the Binod Mills in Part A State. But the remaining amount of Rs. 2,28,392 was held to be attributable to profits which accrued in Part B State, viz., Madhya Bharat. As the dividend income attributable to profits accruing in Part A State was subject to tax under the Act, the Income-tax Officer grossed up the net dividend of Rs. 34,468 to Rs. 50,137 under section 16(2) of the Act. This income was subjected to income-tax and super-tax at the rates prescribed by the Finance Act, 1950, rejecting the claim of the assessee for concession in regard to this income under the " Order ". The balance of Rs. 2,28,392 was not subjecte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anchanbai (Civil Appeal No. 19 of 1969), just now delivered. For the reasons mentioned therein the decision of the High Court on this point is confirmed. This takes us to the second question, namely, whether the dividend income of the assessee should have been assessed both for the purpose of income-tax as well as super-tax at the rates prescribed in the Schedule to the " Order ". The High Court's finding that the dividend income accrued or received by the assessee in Madhya Bharat is subject to super-tax as well as its finding that a part of dividend income is subject to income-tax had not been appealed against. Hence it is not necessary to go into that question. Therefore the question that remains for examination is whether the High C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ively accrued or arose in Madhya Bharat. Therefore, the assessee is entitled to the benefit of paragraphs 5, 6, sub-paragraph (1) of paragraphs 11, 12 and 13 of the " Order ". Paragraph 5 deals with the income of a " previous year " chargeable in the Part B State in 1949-50. The assessee's case does not fall within its scope. Paragraph 6 deals with income of a " previous year " which does not fall under paragraph 5. That paragraph, to the extent it is material for our present purpose, reads : " The income, profits and gains of any previous year ending after the 31st day of March, 1949, which does not fall within paragraph 5 of this Order shall be assessed under the Act for the year ending on the 31st day of March, 1951, or on the 31st d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e chargeable to tax for the assessment for the year ending on the 31st day of March, 1951, includes any income from dividends paid by a company registered in a State in which there was no State law relating to the charge of income-tax and super-tax and the dividend is paid out of profits which were not liable to be taxed, in whole or in part, either in the State or in the taxable territories, no income-tax shall be payable by the assessee on such proportion of the dividend as the non-taxable profits of the company arising in the State bear to the total income of the company. " The income with which we are concerned in this case is dividend income. It was paid by a company registered in a Part B State in which there was no State law relati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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